Extreme changes to system would reduce benefit amounts, duration of benefits for North Carolina families

RALEIGH (December 4, 2012) – Tomorrow, a proposal that will radically change the state’s unemployment insurance system and cause much harm to unemployed families and the state’s economy for years to come will be unveiled at the General Assembly.

“The changes to the unemployment insurance system being pursued by Revenue Laws Committee members will significantly reduce benefit amounts and the duration of benefits while doing nothing to address the long-term financial footing of the unemployment insurance system,” said Bill Rowe, director of advocacy at the North Carolina Justice Center.

The proposal was developed over the past 10 weeks in meetings of select policymakers and staff, but will be released for public review for the first time at Wednesday’s Revenue Laws Committee at the General Assembly.

“The lack of opportunity for public comment or the ability of workers to provide input into the process is of serious concern to the policy design,” said MaryBe McMillan, NC State AFL-CIO Secretary-Treasurer. “The failure to hear from and account for the impact of benefit cuts to workers, their families and communities will have a significant and negative effect on the state’s economic recovery."

North Carolina’s unemployment insurance system has had to borrow $2.5 billion from the federal government in order to pay benefits during a historic downturn and the loss of nearly 300,000 jobs. While the Great Recession is driving the increased demand for unemployment insurance, the state’s unemployment insurance trust fund—what supports the payment of benefits—was severely depleted after a series of tax cuts for employers were enacted in the 1990s. With the proposed benefit cuts, workers will pay for these tax cuts that benefited employers.

“The result will not only be greater financial hardship for tens of thousands of North Carolina families and their communities, but also a blow to the fragile economic recovery, as these families are unable to make ends meet or pay bills,” said Louise Mack, director of Prosperity Unlimited.

On December 4, a petition with more than 575 signatures from North Carolinians was delivered to members of the General Assembly’s Revenue Laws Committee. The North Carolina Justice Center and a coalition of partners along with the 575 petition signers called on the committee to give greater opportunity for public input and delay a vote at their meeting on December 5.

The Revenue Laws Committee meeting will be held at the Legislative Office Building, Room 544, in Downtown Raleigh at 9:30 a.m. on December 5. Experts from the NC Justice Center and unemployed workers will be available for media interviews.